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Posts Tagged ‘exchange’

New York High Court Narrows Statute of Limitations Under Martin Act

Posted on: June 22nd, 2018

By: Ali Sabzevari

New York’s primary weapon aimed at fraud entitled the Martin Act was drastically hindered by New York’s high court, which found that the law’s statute of limitations was three years, not six years.  The case is People v. Credit Suisse Sec. (USA) LLC, 2018 NY Slip Op 04272, ¶ 1 (New York State Court of Appeals).

The Martin Act has been used to police the securities markets since the 1920s. This Act regulates the advertisement, issuance, exchange, purchase or sale of securities, commodities and certain other investments within or from New York.  It is one of the country’s oldest anti-fraud laws and is used by the New York Attorney General to file both civil suits and criminal charges against alleged violators of the Act.

In the Credit Suisse Sec. (USA) LLC opinion, the Court of Appeals noted that it had never before considered the law’s statute of limitations. Contemplating whether claims were governed by a three-year period or a six-year period, the Court ultimately held that the three-year term applies because of the fraudulent nature of the claims brought under the Martin Act.

This decision will have a big impact on claims brought under the Martin Act as well as the defense of such claims.  If you have any questions or would like more information, please contact Ali Sabzevari at [email protected].

Foreign Students and Exchange Visitors Beware!

Posted on: May 15th, 2018

By: Layli Eskandari Deal

On May 10, 2018, USCIS published a Policy Memorandum to provide guidance on how the agency will be calculating unlawful presence for F-1, J-1, and M-1 nonimmigrant visa holders and their dependents.

Generally, foreign students and exchange visitors are admitted to the United States for “Duration of Status”.  This means that the student or the exchange visitor is admitted to the United States for as long as the individual is still doing the activity for which the visa was issued.  For nonimmigrant (F-1 and M-1) this is generally for the duration of time that they are full time students plus the time they are in their period of authorized practical training.  The length of time generally depends on their course of study.  For Exchange Visitors (J-1) this is the period of time for their program to be completed.  Previously, unless USCIS or an Immigration Judge affirmatively terminated the status, F-1, M-1 and J-1 visa holders and their dependents would not accrue unlawful presence in the United States.

USCIS is now providing the following guidance, which is a significant change in how USCIS has treated “Duration of Status” in the past:

Individuals in F, J, and M status who failed to maintain their status before August 9, 2018, will start accruing unlawful presence on that date based on that failure, unless they had already started accruing unlawful presence on the earliest of any of the following:

  • The day after DHS denied the request for the immigration benefit, if DHS made a formal finding that the individual violated his or her nonimmigrant status while adjudicating a request for another immigration benefit;
  • The day after their I-94 expired; or
  • The day after an immigration judge, or in certain cases, the Board of Immigration Appeals (BIA), ordered them excluded, deported, or removed (whether or not the decision is appealed).

Individuals in F, J, or M status who fail to maintain their status on or after August 9, 2018, will start accruing unlawful presence on the earliest of any of the following:

  • The day after they no longer pursue the course of study or the authorized activity, or the day after they engage in an unauthorized activity;
  • The day after completing the course of study or program, including any authorized practical training plus any authorized grace period;
  • The day after the I-94 expires; or
  • The day after an immigration judge, or in certain cases, the BIA, orders them excluded, deported, or removed (whether or not the decision is appealed).

Accruing unlawful presence can prevent an individual from being able obtain a change of status to another visa category while in the United States or obtaining a new visa at a US Embassy or Consulate.  It can also prevent an individual from obtaining US Residency (green card).  It is very important that international students and exchange visitors understand this new guidance and confer with their immigration attorney regarding any questions.

For additional information related to this topic and for advice regarding how to navigate U.S. immigration laws you may contact Layli Eskandari Deal of the law firm of Freeman Mathis & Gary, LLP at (770-551-2700) or [email protected].

Unpaid FINRA Awards May Result in Tighter Membership Rules Governing Brokers and Member Firms

Posted on: February 16th, 2018

By: Theodore C. Peters

On February 8, the Financial Industry Regulatory Authority (“FINRA”) released a discussion paper: FINRA Perspectives on Customer Recovery, which openly addressed the reality that roughly one quarter of FINRA arbitration awards issued in 2016 were unpaid.  According to the paper, of the total of 2,457 arbitration cases in 2016, 1,747 were settled, 212 were withdrawn, 389 were closed by award, and 109 were closed “by other means.”  In releasing the paper, FINRA stated that it “hopes to encourage a continued dialogue about addressing the challenges of customer recovery across the industry.”  FINRA also indicated in the paper that it plans to organize discussions with other regulators and policy makers, “to further address the issue of customer recovery, identify additional data or analysis that may help inform effective decision-making in this area, and consider potential courses of action.”

On the same day, FINRA published Regulatory Notice 18-06, addressing its Membership Application Program (“MAP”).  The Notice does not alter FINRA’s current MAP protocols, but it clearly indicates FINRA’s intent to tighten rules governing membership including, among other things, the transfer of a registered persons from one broker-dealer to another when they have unpaid arbitration claims.  “FINRA is proposing to amend the MAP rules to allow FINRA to take a stronger approach to addressing the issue of pending arbitration claims, as well as arbitration awards and settlement agreements related to arbitration that have not been paid in full in accordance with their terms.”

In their current form, MAP rules permit consideration of a pending arbitration against an associated person as a factor in assessing whether the applicant meets the standards for admission.  However, “a pending arbitration does not create a presumption of denial.”  The amendments proposed by FINRA would give its Department of Member Regulation “rule-based authority to preemptively deny an NMA [new member application] if the applicant or its associated persons are subject to pending arbitration claims.”  This presumption would not apply to continuing membership applications. Further, the proposed amendments would allow the applicant to overcome this presumption if he demonstrated his “ability to satisfy the pending arbitration claims.”

In addition, the proposal would disallow certain business expansions where one or more of the associated persons involved have a “covered pending arbitration claim.”  Such claims are defined as “those whose amount (either individually or in the aggregate) exceed the member’s excess net capital.”

Finally, the amendments proposed by FINRA would disallow “any direct or indirect acquisitions or transfers of a member’s assets or any asset, business or line of operation where the transferring member or one or more of its associated persons has a covered pending arbitration claim, unpaid arbitration award or unpaid settlement related to an arbitration” under certain conditions.

The Notice seeks comment on the proposed amendments.  Comments are due by April 9, 2018.

If you have any questions or would like more information, please contact Ted Peters at [email protected].